Crowdfunding: A Guide to Raising Capital on the Internet

PRAISE FOR CROWDFUNDING Dresner leads the crowdfunding revolution with this comprehensive book to help understand how to raise money or invest money on the Internet. Dive in and learn to run with the crowds! Tim Draper, Founding Partner, Draper Fisher Jurvetson If youre a company looking to raise money or if youre an investor, crowdfunding can be a powerful force. Steven is helping to explain how you can benefit from the disruptive power of crowdfunding. Ryan Caldbeck, CEO, CircleUp This book is an informative collection of stories from finance leaders and a colorful read for those who wish to better understand the dynamic universe of crowdfunding. Congressman Patrick McHenry Written by some of the leading crowdfunding experts, this book is sure to be an indispensable resource for entrepreneurs. Amy Cortese, author, Locavesting

Acknowledgments ix Introduction xi Part I. The Business of Crowdfunding 1 Chapter 1 Crowdfunding: A Historical Perspective 3 Jason Best and Sherwood Neiss Chapter 2 Understanding the “Crowd” 15 Karen Kerrigan Chapter 3 A Statistical View of Crowdfunding 31 Carl Esposti Chapter 4 Current Market Dynamics 47 Andrew Dix and Charles Luzar Part II. Prepa ring for your Crowdfunding campaign 81 Chapter 5 Business Planning in Preparation for a Crowdfunding Campaign 83 David Feldman Chapter 6 Protecting Your Intellectual Property 97 Michael J. Allan and Tremayne M. Norris Chapter 7 Understanding Your Investor Options 111 Reginald Chambers Chapter 8 Communicating with Your Investors or “Backers” 127 Joy Schoffler Chapter 9 Alternatives to Crowdfunding 145 David R. Burton Part III. Understanding the Framework of Rules and Regulations 163 Chapter 10 The Legal Aspects of Crowdfunding and U.S. Law 165 Joan MacLeod Heminway Chapter 11 Crowdfunding Laws Based on Global Jurisdiction 199 Jeff Lynn and Kristof De Buysere Chapter 12 Living with the New Reg D and Its Impact on Pitch Events and Demo Days 213 Kiran Lingam, Trent Dykes, and Megan Muir Afterword 227 About the Author 233 About the Contributors 235 Author’s Disclaimer 241 Index 243

STEVEN DRESNER is the founder and CEO of Dealflow.com which provides software for deal marketing and transaction analysis. Stevens experience includes managing businesses in the areas of software development, financial databases, and media. Steven has a BS in psychology and both an MBA in finance and a graduate degree in computer communications and networks. Steven is co–author and editor of two prior books on financing strategies and is frequently quoted in the media on ways companies can successfully raise capital.